Question

Use the following data to calculate the cost of merchandise sold:

Sales:$80,000
Beginning inventory:$5000 Purchases:$21,800
Purchase discounts:$790
Ending inventory:$5,100

Answer 1

Cost of merchandise sold = Beginning inventory + purchases - [purchase discount +ending inventory].
Cost of merchandise sold = 5000 + 21,800 - [790 + 5,100]
26, 800 - 5,890 = 20,910
Therefore, the amount of money that is used to produce the merchandise sold is $20, 910.